Italy’s Treasury signs off on decree to sell Monte dei Paschi: sources

September 7, 2020

By Giuseppe Fonte

ROME (Reuters) – Italian Economy Minister Roberto Gualtieri has signed off on a government decree listing options to sell Italy’s controlling stake in Monte dei Paschi di Siena <BMPS.MI>, two sources close to the matter told Reuters.

Rome rescued Monte dei Paschi in 2017, spending 5.4 billion euros ($6.4 billion) on a 68% stake which under the terms of the bailout negotiated with European Union competition authorities must be sold next year.

Gualtieri’s signature paves the way for final approval by Prime Minister Giuseppe Conte, the two sources said, asking not to be named because of the sensitivity of the matter.

The Italian Treasury declined to comment.

Although Italy’s co-ruling 5-Star Movement wants the state to delay its exit from Monte dei Paschi, sources have told Reuters the Treasury is working to find a buyer by the end of the year.

The goal is to combine a merger with a complex scheme to free the bank of its remaining problem loans, sources said.

While Banco BPM <BAMI.MI> is seen by the Treasury as a good partner, the Milan-based bank has repeatedly denied any interest in a tie-up with Monte dei Paschi.

The decree, obtained by Reuters, authorises the Treasury to help Monte dei Paschi shed 8.1 billion euros in problem debts through a deal with state-owned bad loan manager AMCO.

This clean-up “is essential to give the bank the prospect of a lasting return to profitability … and pave the way for the economy ministry to sell its holding,” the decree states.

Rome also lists ways the government can liquidate its holding, which include a share offerings, a public tender or negotiating a merger.

(Reporting by Giuseppe Fonte; Editing by Valentina Za and Alexander Smith)